On a decision that will affect up to one million rent regulated apartments in New York City as well the the property management companies delivering services, the Rent Guideline Boards voted to increase rents for the first time in three years. On a 7-2 vote, the 9 member panel decided to increase rents up to 1.25 percent for one-year leases, and 2 percent for two-year leases. The new regulation by the Board will affect leases commencing October 1, 2017 and terminating September 30, 2018. New York City rent regulated apartment units are in buildings that were built before 1974 with six or more units, and also constructed or renovated since then with special tax benefits.
The Rent Guidelines Board had decided not to increase rents for the past two years and were under increased pressure by landlord advocacy groups who complained of higher operating costs. The Board took it into account when calculating the said increase. According to the New York Times, the Board considered a 6.2 percent increase in the price index for operating costs for 2016 and forecast a 4.4 percent increase next year when determining the increase. Board members also considered that many tenants had stagnant incomes as the costs of living soared.
The Rent Stabilization Association (RSA), which is the largest trade association in New York City exclusively dedicated to protecting and serving the interests of the residential housing industry and representing over 25,000 landlords and agents proposed a higher increase. They requested a 4 percent increase for one year leases and 6 percent for leases with two year terms. Jack Freund, vice president of the RSA believes that the slight increase was politically motivated as he believes the Board panders to Mayor De Blasio’s political agenda.
The Mayor’s Office spokeswoman Melissa Grace stated:
“We will never go back to the days when the landlord lobby got big rent hikes regardless of what the data said. Taken together, the past four years have had the lowest guidelines in history — including the first two freezes ever — and a court ruling affirming the importance of tenant affordability in this equation.”